MENLO PARK, Calif. -- Sun Microsystems unveiled an ambitious effort at an event for reporters here this week to improve video-delivery services that might make the popular Netflix movie service sweat a little.

The Sun Streaming System, geared toward cable and telco operators, is designed to address increased interactivity and personalization, as well as the increasing throughput demands that come with broader adoption of high definition. It will offer about 10 times the streaming capacity of competitive platforms at a price of less than $50 per stream.

But analysts said it could
be a few years before sales translate into deployment and broad end-user availability.

Sun Streaming Software is a single point of control to operate and manage
the video-streaming system. It enables operators to reduce
time to market for deploying new services by supporting more than 20 video-streaming features, including MPEG-2 and MPEG-4 formats; bit-rate support
from 1Mbps to 20Mbps; standard-definition (SD) and high-definition (HD)
streaming; encrypted and clear content streaming; and splicing and personalized playlists for permission-based target advertising.

Serving up video.
Source: Sun

Sun said open software standards, such as CORBA, XML, HTTP and RTSP, will
allow operators to easily integrate third-party components.

The Sun Fire X4950 Streaming Switch provides a streaming density at 320Gbps and up to 2 terabytes of memory to enable scalable video streaming with a low cost per stream. And the Sun Fire X4500 server, powered by Dual-Core AMD Opteron processors, delivers the performance of a four-way x64 server, with 24TB of storage in seven inches of rack space for up to 9,400 hours of 2Mbps video content storage.

The market for the kind of advanced services and targeted video
advertising Sun Streaming is designed for is just starting to emerge. For
2006, IDC estimated the current video on-demand market was about $350
million.

"I have that growing to about $2 billion in 2011," IDC analyst Eve
Griliches told internetnews.com. "The market is going to explode in
the next year or two."

Griliches added that Sun is in a good position to become one of the
first vendors to deliver a next-generation video-server platform.

"The Holy Grail here is to really be able to produce targeted ad
insertions (based on what consumers watch)," she said. "The level of
targeted advertising today in video is really in its infancy."

Griliches
also noted there will be opportunity beyond the traditional living-room TV,
with the increasing use of video on PCs, notebooks and even handheld devices. "In essence, all that video will go through a video server at some
point."

Bechtolsheim was asked if the Sun system could eventually put services
like Netflix, which mails DVDs to consumers for a flat fee, out of
business. While not addressing the business question, he said Netflix has
been an inspiration.

"They proved a better delivery method will be adopted," said
Bechtolsheim, noting that Netflix made it easier to rent new movies.

Sun
expects in the near future to have new, truly personalized video on demand
services will bring those movies, and a far broader range of other
programming than is currently available, directly to your TV.